Ericsson Adds to Euro GPON Action
The Swedish vendor announced today that CYTA , the incumbent operator in Cyprus, is deploying its EDA1500 GPON platform for a fiber-to-the-home (FTTH) pilot, marking Ericsson's first GPON engagement in Europe, albeit a small one.
Alcatel-Lucent (NYSE: ALU) has been Europe's early dominant GPON vendor with more than 15 deployments in total, including the Asturias project in Spain and a slice of the action at Orange (NYSE: FTE). (See Danish Utility Uses AlcaLu, Alcatel-Lucent Wins GPON Deal, FT Fleshes Out FTTH , and Asturians To Get Broadband.)
Nokia Networks is also pitching for business and has one announced GPON deployment to date at Danish utility company EnergiMidt .
These and other vendors are desperate to get an early toehold in the market so they can take advantage of the growth to come. While European FTTH connections had not reached 1 million by the end of 2006, Heavy Reading chief analyst Graham Finnie believes this could grow rapidly during the next five years and reach 16.6 million by the end of 2011. (See FTTH Council Sets Euro Target.)
Separately, Light Reading Insider analyst Simon Sherrington estimated in his recent report, "GPON Market Forecast: The Horizon Beyond Verizon," that GPON will be used for half of Europe's fiber-connected households by 2011. (See Bright Prospects for GPON.)
Sherrington also predicts significant global growth for the PON technology in the next five years. He forecasts the worldwide market for GPON electronics -- optical network terminals (ONTs) and optical line terminals (OLTs) -- will be worth $4.7 billion in 2011, up from about $1.3 billion this year.
"With many vendors expecting the market to be dominated by just four or five players, early success may be critical to capturing the biggest chunks of that market share," writes the analyst.
If GPON, a point-to-multipoint passive optical technology that allows a single fiber run to serve up to 64 customers, is to account for half the fiber connections in 2011, that leaves millions of connections to be served by point-to-point fiber connections, where active Ethernet components are used to provide dedicated bandwidth to each subscriber. (See Ethernet FTTH Triple-Play Services.)
The latter Active Ethernet option has already been chosen by municipal fiber projects, such as the one in Amsterdam, and alternative European carriers, such as France's Iliad (Euronext: ILD). Both of those projects have Cisco Systems Inc. (Nasdaq: CSCO) as the lead equipment supplier. (See Iliad Updates on FTTH, 3G and Amsterdam Gets Active With FTTH.)
And CYTA's pilot project, notably, is not just using Ericsson's GPON technology -- it "includes also a point-to-point network," notes the Swedish vendor in its press release.
Some in the industry believe GPON will ultimately dominate the market. Alcatel-Lucent is particularly vocal about the benefits of GPON over point-to-point fiber alternatives. At a recent media briefing in London, Michel Rahier, president of the vendor's wireline business group, proclaimed that "point-to-point in the last mile has no future. In terms of operational expenditure, it's a solution that's more costly. The footprint is 20 to 30 times more than that of GPON.
Rahier added: "Currently there's maybe 5-10 percent of scenarios where it makes a better business case, but that won't last. In five to seven years, the majority of fixed broadband terminations will be GPON."
That view isn't shared by Martin Thunman, CEO of Swedish broadband access vendor PacketFront AB , which already has an Active Ethernet offering, but is now developing a GPON platform, too. (See PacketFront Gets Into GPON.)
Thunman says there are benefits to the GPON approach. "It's a valid claim that you can get more density in the central office with PON," as more subscribers can be supported by the equipment deployed.
But the "disadvantage is the bandwidth it can deliver to each customer," which is typically 19-38 Mbit/s per user, compared with 100 Mbit/s for Active Ethernet.
In addition, GPON is still a very young technology, Thunman notes. There's a lot of inter-vendor interoperability issues to sort out, and a lack of experienced technicians in the market. "It's a market that's still ahead of us all."
PacketFront, he says, is preparing to meet the varying needs of the market. "We are not being religious about the market. There are cases where GPON will have advantages and cases where point-to-point will have advantages. Those [vendors] that are religious about one way or another will create problems for themselves."
But there is definitely demand for GPON. Thunman says he is talking to service providers that are looking at deploying both fiber access approaches, using GPON in areas of less dense population and Active Ethernet in dense urban areas and multi-dwelling units (MDUs).
He expects such strategies to come from competitive carriers and city networks, while national, incumbent operators are more likely to go with GPON.
That view ties in with France Telecom's outlook on its fiber rollout. In February, Gilles Coullon, a France Telecom VP with responsibility for FTTH developments, told a conference audience that the carrier had considered all the fiber options and had decided on a GPON-based network because "that best suits our legacy infrastructure, in terms of duct space and building space. A solution that takes up less space is preferable." (See FT Fleshes Out FTTH .)
— Ray Le Maistre, International News Editor, Light Reading